What term describes the funds provided by shareholders, including share capital, retained profits, and reserves?

• A. Working capital
• B. Gearing
• C. Shareholders' funds
• D. Liquid assets

Answer: (C)

You’re looking at the owners’ equity that a business holds—the funds that come from shareholders and stay in the company. Share capital is the money raised from issuing shares, retained profits are the earnings kept in the business, and reserves are additional allocations of profits set aside for specific purposes. Put together, these form the company’s own funds, known as shareholders’ funds or equity. This is why it’s the correct term.

Working capital refers to short-term liquidity, not overall ownership funds. Gearing compares debt to equity, focusing on leverage. Liquid assets are cash or assets that can be quickly converted to cash, not the total equity stake.